Ethereum Faces Massive Capital Flight to Solana as $86M Flows Into DeFi Rivals

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<a href="https://pricpr.com/eth-usd/">Ethereum</a> Price Analysis: What Next for <a href="https://usdinrusd.com/eth-usd/">ETH</a> as Traders Swap $86M into Solana DeFi protocols ?

The cost of Ethereum drops under $1,600 due to mounting tension as a result of an exodus of approximately $86 million in DeFi capital migrating towards more rapid and cost-effective alternatives such as Solana.

Capital Rotation Into Solana Spurs Concerns for Ethereum’s DeFi Dominance

The cryptocurrency Ethereum (ETH) is experiencing increased competition as approximately $87 million worth of assets moved out of its system and into rival blockchains in the week following the repeal of a contentious DeFi regulation by former U.S. President Donald Trump. This shift represents renewed competitive pressure for Ethereum’s ecosystem.

On April 10th, Trump approved a bill annulling a directive from the Biden administration that demanded DeFi protocols adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. This action was generally viewed as a triumph for crypto-native initiatives, as it eliminated a significant regulatory burden that could have jeopardized the industry’s decentralized nature.

But for Ethereum — the current hub of DeFi liquidity — the impact has been less than favorable.

As a crypto investor, I’ve noticed some interesting trends based on data from Wormhole, the largest cross-chain bridge on Ethereum. It seems that Solana has been the big winner, with an impressive $54 million flowing into its ecosystem. Not far behind, Base and Arbitrum managed to attract approximately $9.6 million and $5.8 million respectively, while Avalanche saw around $3.9 million flow in.

Rapid Transfers from Ethereum Sparks 21% rally for Solana

Significantly, the assets destined for Solana were directed towards Decentralized Finance (DeFi) platforms including Jupiter, Kamino, and MarginFi.

As a researcher, I’ve observed an upward trend in Total Value Locked (TVL) within the Solana DeFi ecosystem following the recent repeal of the DeFi law signed by former President Trump last week. This surge seems to suggest a positive response from the DeFi community on Solana.

Over the course of a week, from April 9 to April 16 (as depicted in the graph), the total value locked (TVL) in Solana’s decentralized finance (DeFi) platforms grew by approximately 12%, reaching $6.9 billion at the time of press on Wednesday. This surge indicates that investors deposited around $800 million into various native DeFi protocols within the Solana ecosystem during this period.

Currently, Solana’s price stands at approximately $135, showing a 21% increase over the past week. Conversely, Ethereum is trading below the $1,600 level, registering an 8% growth during the same period, which represents one of the smallest weekly returns among the top ten cryptocurrencies by rank.

Looking Ahead:

The amount of money flowing into decentralized finance (DeFi) through the Wormhole bridge suggests that Ethereum might be relinquishing its market leadership, given that increasing regulatory understanding is driving investors to explore alternative Layer-1 and Layer-2 platforms.

The current movement, or shift, of users away from Ethereum towards quicker, more cost-effective platforms is evident. Despite Ethereum maintaining the highest total value locked (TVL) currently, the latest statistics indicate a noticeable change in the balance of power.

Indeed, it’s worth noting that prominent institutional investors are increasingly exploring crypto in new areas such as Real-world Asset and securities Tokenization. Notably, they are leaning towards alternate layer-1 protocols like Hedera and Avalanche. Meanwhile, Solana and Cardano continue to be influential among retail investors.

In the year 2022, Solana faced some issues related to performance. However, in recent times, it has made a remarkable comeback, significantly improving its operational stability (uptime) and witnessing an increase in the number of developers actively working on it.

This week, our network handled more than 60 million transactions per day, significantly outpacing Ethereum’s 1.1 million and consistently keeping transaction fees under a penny, as reported by Solana Explorer.

Ethereum Price Forecast: ETH Eyes $1,700 Rebound as Momentum Shifts

Chart predictions for Ethereum suggest an early indication of a possible recovery, as it ended the day at $1,592.60 with a minor increase of 0.24%.

The Bollinger Bands are narrowing down, hinting at reduced volatility and a potential “squeeze,” with the middle band offering resistance at approximately $1,695.42 as a possible initial upward goal. At present, Ethereum’s price is trying to recoup losses within the lower part of the bands, which could indicate the possibility of an impending bullish shift.

In simpler terms, when the dots from the Parabolic SAR (Stop and Reverse) are now positioned under the candles, this is often seen as a strong indication to buy in strategies that follow trends.

This strengthens the expectation of an increase in Ethereum’s price, considering that the MACD histogram has moved into a green zone for the first time in several weeks. As the MACD line approaches the signal line, it indicates that a surge of bullish power might be imminent.

If Ether (ETH) surpasses $1,695, it could potentially move up towards the upper boundary of the Bollinger Band, which is around $1,960. Yet, if it can’t hold its current support close to $1,430, there’s a possibility that Ether’s price might revisit $1,397.19 – a level where the Stop and Reverse (SAR) previously indicated support.

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2025-04-17 01:40